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Opinion Contributor

States show folly of energy mandates

Lower-income households bear the brunt of these policies, the authors say. | Reuters

By GROVER G. NORQUIST and PATRICK GLEASON | 4/2/13 4:46 AM EDT

With the Keystone XL pipeline on its way to final approval and President Obama’s picks to head the Departments of Energy and Interior announced, deep-pocketed environmental lobbying groups and activists that are a key part of the Democratic base are formulating their goals and agenda for Obama’s second term.

While Sen. Barbara Boxer (D-Calif.) has introduced carbon tax legislation, it is unlikely to pass the GOP-controlled House; and rather than make another attempt at cap and trade, which the Democrats couldn’t pass when they controlled all of Washington during Obama’s first two years in office, many think the next play will be for a national renewable energy portfolio standard (RPS) that would mandate that a certain percentage of the nation’s electricity be produced from renewable sources.

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Fortunately there are the states, those fifty laboratories of democracy as former Supreme Court Justice Louis Brandeis referred to them, to show us the negative impact that a national renewable energy standard would have. Twenty-nine states and the District of Columbia already have a renewable energy mandate on the books. These mandates inject government into the business decisions of utility companies, requiring them to procure energy from more costly and less reliable sources than they otherwise would.

The increased energy costs produced by renewable mandates are passed along to consumers in the form of higher utility bills. According to the Institute for Energy Research, utility bills in states with a renewable energy portfolio standard (RPS) are 40 percent higher on average than in states without one.

While the Sierra Club and many Congressional Democrats dream of enacting a national RPS, over a dozen bills have been introduced this year to repeal a number of them at the state level. In fact, a bill that would repeal North Carolina’s RPS will be heard in committee later this week.

In 2007, North Carolina became the first state in the South to impose a renewable energy portfolio standard. Since then, two things have occurred: 1) Enough time has passed that the economic harm wrought by the state’s energy mandate has become evident and 2) The composition of the state legislature has become more amenable to repealing misguided regulations like the state’s RPS.

Republicans won majorities in the state legislature in 2010 and took total control of state government for the first time in over 100 years with the election of former Charlotte Mayor Pat McCrory as governor last November.

Last month, Representative Mike Hager (R) introduced HB 298, legislation that would repeal North Carolina’s energy mandate. A companion bill was introduced in the state senate shortly thereafter. While an RPS repeal effort stalled in Kansas earlier this year due in large part to the political clout of the wind industry in that state, the North Carolina legislation has a shot of passing. And it’s not hard to see why, given the strong case had by proponents of RPS repeal.